Buying a house is a big investment. It really puts a dent on your financial resources. Of course, the expenses do not end with the down payment. You still have to contend with the monthly payments for the mortgage. This is a financial situation that you will have to live with for years until you have fully paid off your loan.
But what happens if you get behind in your mortgage payments? A delay in payment can have very serious consequences for your mortgage situation. If the delinquency in payments has become too severe then your home could be in danger of foreclosure. A foreclosure means that your property will be repossessed by the lending institution that gave you your mortgage.
Fortunately, even if you have defaulted on your payments, it does not necessarily mean that your property will be foreclosed. There are various alternatives to a foreclosure that you can take. Some of these are:
1) Paying the past due balance. Generally, all lending institutions are required to accept all the payments that were delinquent and reinstate the loan. The delinquent payments that you have to pay may also include some legal fees especially if you are already in the foreclosure stage. There are also lending institutions that require certified funds in order to reinstate the loan.
2) Forbearance and Repayment. One of the most common ways of resolving a delinquent mortgage is to work out a plan with your lending institution where in you get to pay a part of your delinquency every month on top of your regular monthly payments. If you are in a situation where you are not able to meet the monthly mortgage payments, your lender can elect to extend the forbearance by suspending payments for a certain period of time up until you can start a repayment schedule.
3) Payment Assistance. Some state and local governments and also private charitable organizations have instituted programs that help people with delinquencies pay all or part of their mortgage obligation for a certain period of time. Please send me a quick email for a list in Arizona.
4) Loan modification or reamortization. In a reamortization, the delinquent mortgage amount is added to the loan balance as a way of bringing the mortgage payments up to date. This move increases not only the total loan amount but also the monthly payments. Of course, the increase in payment will not be as large if the life of the loan is also extended.
5) Sell it. A private sale of the property affected by the delinquency can also be done as it will allow you to meet your obligations as well as get any equity ($$$) that may have accumulated. In private sales it is usual that the amount is greater than the stated amount owed on the loan. It's important that you speak with a Realtor to get an idea of value, as there are a few options that can get you the most money possible
Most of these alternatives presume that you will be able to pay your mortgage payments at some point. With these types of programs, it becomes so much easier to address the problem of foreclosures.
As a Certified Scottsdale Real Estate Specialist who has been a 30 year resident of Scottsdale and North Phoenix, I provide personal service to individuals who are interested in buying or selling homes Scottsdalem North East Phoenix, and surrounding communities.
I have been a Realtor for 10 years with a history of direct involvement in the local real estate industry for over 30 years as well. Prior to entering real estate sales full time, I was co owner of a local Mortgage company for 10 years. Before that I handled real estate construction financing for several Arizona banks. .
Making the best decisions on a real estate purchase or sale requires a team effort. My role is to be my clients’ coach through the process. Directing them to the options that will provide the best path to meet their goals. I helped my clients complete over $4.5 Million Dollars in real estate transactions in 2013. About 40% of these were home Sellers and the rest were purchasing homes. I look forward to hearing your goals and helping you to achieving them.